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During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
Money Moves, 5/24: Chocomize Co-Founder Fabian Kaempfer talks with Bloomberg’s Deirdre Bolton about the business of customizing chocolate
The president's campaign has a new rule—no cell phones allowed
In honor of remote control inventor Eugene Polley, we recognize other influential but neglected inventors who have felt the sting of stolen glory
Forget Adderall. Traders now pop chia seeds to stay focused and energized
The Italian automaker and others are adding hybrid technology to elite cars
The storied bridge that links San Francisco and Marin County changed the face of California
Schools cultivate ties with startups before they're big successes
Dave McClure's traveling venture capital show scours the world for promising startups
Get Four
|  | AUGUST 23, 2004
Amory Lovins' Leaner, Greener World [Page 2 of 2] Q: Is spending on efficiency technologies and alternative energy sufficient to achieve these goals? A: The U.S. lags badly in both private and public investment in both efficient energy use and alternative supplies. Most of the fuel and power we now use is wasted. In economic terms, most energy-savings efforts in businesses rank among the lowest-risk investments in the whole economy and return many times their marginal cost of capital. This egregious misallocation of capital means wealth is wasted instead of being created. Q: Where will the leadership come to make this happen? A: In the public sector, we need far more than expanded R&D. We need to refocus on best buys, and then pursue aggressive application of the best solutions. Instead, federal energy policy has been gridlocked for two decades -- it tends to bails out losers, occasionally helps winners, and is driven largely by rent-seeking constituencies rather than national needs. As a result, state policy is often the leader by default. We need a coherent, supportive policy framework that doesn't keep killing our domestic industries. Perhaps the most vital single reform would be to change the way distribution utilities form retail prices. In 48 states [all but Oregon and California], utilities are rewarded for selling you more electricity and gas, but penalized for helping you save it to cut your bills. This is nuts, and remedies are well proven, but they're not on the policy agenda. Q: How does the U.S. stack up compared to other countries in advanced energy technologies and policies? A: Japan has passed us in photovoltaic solar cells. Denmark, Germany, and probably this year, Spain, have passed us in wind power. Europe, Japan, China, and soon Canada are passing us in automotive efficiency, and proposed weight-based safety rules would further dim our export prospects. Q: Wind and solar cells have been around a long time. Are other technologies coming down the pipe? A: There are cheap, efficient hydrogen reformers, cost-effective microturbines, and low-temperature desiccants [which use low-grade heat to dry air -- a precursor to cooling it by a little evaporation]. Bioethanol and biomaterials from cellulose waste, and waste-derived biodiesel, are coming on strong. There are important grid technologies too, such as smart, omnidirectional power grids and affordable on-site electricity storage. Durable fuel cells will be competitive in important niche markets. Right now, U.S. power plants throw away more energy as waste heat than Japan uses for everything. Q: What will the energy future look like when this all comes together? A: Our energy supply will become increasingly diverse, dispersed, and renewable. In time, centrally located, traditional thermal-power plants will come to be sentimentally admired, like Victorian steamships are for us. Wind, and perhaps carbon-sequestered coal, will beat natural gas for making hydrogen, which will emerge as the dominant energy carrier. The potential wind power in the Dakotas alone could make enough hydrogen to run all U.S. highway vehicles, if they're very efficient. Ultralight hybrid vehicles will be ubiquitous, some with fuel cells so they work as distributed generators. While they're parked, instead of sitting idle, the fuel cells could be used to generate power onto the grid. Most importantly, all energy uses will become far more efficient, so most of the new supplies commonly proposed won't be needed, and irrationally exuberant investors in the costlier ones will lose their shirts. Q: How do the energy platforms of the Presidential candidates compare? A: RMI is nonpartisan and doesn't comment on candidacies. However, two years of failed federal energy-policy legislation has a clear lesson for both candidates. If we keep making energy policy in the old way, driven by heavily larded constituency wish lists, it'll keep on train-wrecking. Whoever gets elected can and should switch to building energy policy around the core of existing consensus. And even without federal leadership, dramatic oil savings can still be achieved by federal administrative action alone, or if necessary, and probably more slowly by state action alone.
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